By Susan J. Campbell, TMCnet Contributing Editor

The outlook for video conferencing appears to be strong as the demand within the small business to the large enterprise sectors continues to grow. The growth is being driven by the fact that video conferencing tools for the desktop are inexpensive, easy to install and have been proven to be effective communications tools.

This TMCnet blog highlighted the effectiveness of video conferencing solutions and the reality that options in this space have evolved significantly in the last five to 10 years. According to data released by the International Data Corporation (IDC (News - Alert)), revenue numbers in video conferencing suggest enterprises are making investments in this area at a rate that exceeds growth of other applications that leverage IP communications.Per IDC research, the video conferencing market overall enjoyed an increase of 24.3 percent year over year in the third quarter of 2011. Cisco (News - Alert) and Polycom continue to lead this market. Cisco claims the lion’s share with 50.4 percent. Polycom is at a distant second with 19.4 percent of overall market.

The remaining market share appears to be a battlefield for innovative companies such as RADVISION, Vidyo (News - Alert) and even ooVoo. With the rapid growth taking place in the market, new innovations are likely to appear, the price is likely to continue to come down and competition will make solutions even better for the end user.

One IDC analyst, Rich Costello, points to technology improvements and better networks overall as key drivers for growth in this market. Effective video conferencing sessions are possible within the office infrastructure. Plus, expanded solutions for the home office include faster broadband, enabling remote office and home workers to stay connected to colleagues and customers regardless of location.

Broadvox (News - Alert), a purveyor of Unified Communications platforms, suggests that the key driver for video conferencing is collaboration. Employees are talking to other employees, key players are collaborating with colleagues, partners are in touch and customers throughout the world can have near face-to-face interactions with account managers, promoting an environment where information can readily flow and the time to market for products and services is reduced.

The demand growth in video conferencing can also be attributed to the growing use of presence, IM and education. According to estimates published by Frost & Sullivan (News - Alert), the market will see a compound annual growth rate of 19 percent through 2015 as OEMs search for a wide range of solutions in video conferencing offered through the cloud or video conferencing as a service (VCaaS).

VCaaS is easily the best way to attract SMBs to this segment as it drastically reduces deployment cost, requiring only subscription payments over time. As SMBs embrace videoconferencing as a critical component of their business processes, then major innovation is expected to follow close behind.